In every one of his State of the Union addresses, President George W. Bush has pledged to wean the U.S. off foreign oil. With the Democrats now in control of Congress, he may be able to start delivering on that promise.

Moving toward U.S. “energy independence” is emerging as one of the few areas where Bush may find common ground with the congressional Democrats who oppose him on the war in Iraq, taxes and social issues such as abortion and stem-cell research.

Administration officials say Bush’s seventh annual address to Congress on Jan. 23 will reiterate his vow to cut Middle Eastern oil imports by 75 percent by 2025 and curb what he describes as a national “addiction” to fossil fuels. Democrats and the White House are likely to agree to boost support for biofuels, increase federal funding for electric-powered vehicles and sweeten incentives for the use of solar and wind power, lobbyists and industry experts say.

“We’re prepared to do more, so I hope we will be working in partnership with Congress on what makes sense,” Rob Portman, Bush’s budget director, said in an interview.

“There’s a lot of common ground” on alternative energy, says Senator Jeff Bingaman, 63, a New Mexico Democrat who heads the Energy and Natural Resources Committee.

Room for Skepticism

There’s also plenty of room for skepticism. Energy independence and reducing the use of fossil fuels are goals that date back three decades, and achieving them will require big concessions on both sides.

“The history of energy legislation shows you really don’t get anything done unless there’s broad bipartisan support,” says Linda Stuntz, a Washington attorney who was deputy secretary of energy from 1989 to 1993.

To date, Bush has shown little inclination to support conservation, a top objective of Democrats. The new congressional majority, meanwhile, has vowed to press the administration to consider measures it has resisted in the past, including mandatory caps on carbon dioxide emissions, tougher fuel-economy standards for cars and a national renewable-energy requirement for utilities similar to one Bush, a former oil executive, set as governor of Texas.

The president and Congress will have their first confrontation over energy this week when the House considers legislation to revoke about $16 billion in subsidies for the oil and gas industry.

Exploration and Production

For most of the past six years, the administration and Republican-controlled Congress have focused on trying to increase oil and gas supplies by opening more federal lands to exploration and production, including repeated attempts to allow drilling in Alaska’s Arctic National Wildlife Refuge and measures to increase output in federally controlled waters off the U.S. coasts.

“Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy,” Vice President Dick Cheney said in 2001.

Bush shifted his focus early last year, after Hurricane Katrina disrupted gasoline and gas supplies from the Gulf Coast and oil prices rose to record levels. In his 2006 State of the Union address, he announced an “Advanced Energy Initiative” calling for $31 million of funding to improve car-battery technology, $150 million for research of biofuels such as cellulostic ethanol, and a $46 million increase in funding for hydrogen fuel-cell technology.

Adjourned Without Action

The Republican-controlled Congress adjourned in December without voting on funding for the plan. Jim Connaughton, chairman of the president’s Council on Environmental Quality, says Bush wants the new Congress to approve the proposal this year.

“The politics of energy have changed pretty fundamentally in the U.S.,” says Paul Bledsoe, a spokesman for the Washington- based National Commission on Energy Policy, a bipartisan advisory group that includes academics, oil executives, labor leaders and environmentalists. “Katrina was a big awakening moment, both in terms of gasoline supply and awareness of climate change.”

Democrats have shown a general willingness to cooperate and are considering some proposals of their own. House Speaker Nancy Pelosi, a California Democrat, advocates doubling the amount of corn-based ethanol that must be used in gasoline supplies to 15 billion gallons by 2012, from the current level of 7.5 billion gallons.

Ethanol Fuels

At the same time, a bipartisan group of senators –including Tom Harkin, a Democrat from corn-producing Iowa, Richard Lugar, an Indiana Republican, and Barack Obama, an Illinois Democrat – introduced legislation earlier this month to give tax credits for cars that can run on fuel that is mostly ethanol.

“Every member of Congress now has discovered ethanol,” Representative Collin Peterson, a Minnesota Democrat who heads the House Agriculture Committee, said in an interview. By mentioning biofuels such as switchgrass in his 2006 State of the Union address, Bush “really started people thinking,” says Peterson, 62.

Such proposals may find a receptive audience in the White House, says Robert Dinneen, president of the Renewable Fuels Association, a Washington-based trade group that represents Decatur, Illinois-based Archer Daniels Midland Co. and other U.S. ethanol makers.

`Extraordinarily Supportive’

Bush and Cheney “come from the energy industry, they recognized perhaps even better than most the important role that ethanol and bio-diesel can play in our motor-fuel markets,” Dinneen says. “They have been extraordinarily supportive, and I don’t see that changing.”

Mark McMinimy, an analyst with Stanford Group in Washington, said in a note to his clients last week that “it is becoming increasingly apparent that the renewable fuels/ethanol juggernaut enjoys one of the most prized commodities in Washington: broad- based, bipartisan political momentum.”

Representative John Dingell, a Michigan Democrat who heads the House Energy and Commerce Committee, says he is scheduling a full agenda of hearings and legislation this spring aimed at pushing measures to encourage energy efficiency and provide research funding for ethanol, wind and solar power.

`Common Approach’

Whenever possible, he says, he will seek accommodation with the White House and the Republican minority in Congress. “It’s our job to try to develop that common ground and common approach and we will be doing those things,” Dingell, 80, said in an interview Jan. 11.

The White House may also face pressure to do more on energy from members of Bush’s party as some Republican lawmakers begin to show they may be willing to review their opposition to conservation measures they had previously condemned as punitive to U.S. businesses.

One example is Senator Ted Stevens, an Alaska Republican who earlier this month introduced a bill requiring automakers to boost car efficiency standards to 40 miles per gallon, from the current level of 27.5 miles per gallon.

Connaughton says he is optimistic that lawmakers will refrain from any changes to standards that would further harm U.S. automakers, which are in financial difficulty.

Rational Policy

Dingell and Representative Rick Boucher of Virginia, another Democrat on the energy committee, “will ensure that a rational policy is created,” Connaughton says. “For those who would have concerns that something either economically damaging would occur or a significant job dislocation would occur, well those are two Democratic legislators who understand where those lines are.”

Finding agreement with Democrats on energy policy would allow Bush, 60, to fulfill a promise he made when he took office. “America must become more energy independent, and we will,” Bush said in 2001, when the U.S. imported 55.5 percent of the crude oil it consumed. In 2005, that figure was 59.8 percent, according to Department of Energy figures.

“The Bush energy policy and the legislation that was enacted could be characterized as 19th century: drill, drill, drill and give more tax breaks to oil and gas companies,” says Representative Frank Pallone, a Democrat from New Jersey and a member of the House Energy Committee. “That was ultimately a failure.”

To contact the reporters on this story: Brendan Murray in Washington at brmurray@bloomberg.net Tina Seeley in Washington at tseeley@bloomberg.net

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